The real estate investors’ guide to getting past Uncle Sam. How the industry has turned tax avoidance into a legal art form.

“Property owners who want to benefit from an asset’s increase in market value have two options: They can sell or they can refinance. If they sell (without doing a 1031 exchange), they pay capital gains tax on any profit. Refinancing, however, doesn’t typically count as a “realization event” in the eyes of the IRS, explained tax attorney David Spencer — meaning there is no profit to be taxed.”